Buy-to-let investment forming part of 'retirement planning'

Investors are increasingly seeing the buy-to-let market as an effective way to plan for their financial futures, with a BM Solutions/BDRC Continental survey revealing that 80 per cent of landlords consider their rental yields to be a source of supplementary income to their pension.

And with six out of ten of these respondents explaining that they are planning to live off of their rental income when it comes to retirement, it seems that the private rented sector continues to be perceived as a sound area for investment.

Phil Rickards, head of sales at BM Solutions, said: "It is clearly evident that Britain's love affair with bricks and mortar remains strong with many landlords looking at property investment as a supplement to their pension in retirement.

"Landlords remain confident in the long term viability of the rental market; with the economic uncertainty in the UK and Europe, landlords are being more cautious and selective in expanding their portfolios."

The results of the survey indicate that landlords remain particularly confident in the continued strength of the buy-to-let sector, and the fact that so many are expecting to rely on their returns in some way during retirement could be a result of the speculation surrounding the future of pension values.

What's more, with the report also finding that rental yields have now jumped to 6.7 per cent - increasing from 6.2 per cent during the first and second quarter of the year - there are few signs that any downward trend in the profitability of the private rented sector is set to emerge.

If current conditions persist and demand for rental accommodation continues to outstrip supply then investors could stand to see substantial yields from their portfolios when it comes to retiring, although they'll have to remember to protect their properties with landlord insurance policies to guard against unforeseen costs.